NFLX Options Signal Battle at $1,100–$1,300: How Traders Can Position for Volatility

• Netflix (NFLX) fell 9% after Q3 earnings missed estimates due to a $619M Brazilian tax charge, despite revenue hitting $11.5B.
• Options data shows heavy bearish positioning: 4,881 puts at $1,100 and 5,936 calls at $1,300 (Friday expiry).
• Technicals suggest a critical support test at $1,152 (lower Bollinger Band) and a potential rebound toward $1,200.
• The put/call ratio (1.10) hints at near-term bearish bias, but RSI (67.6) and bullish moving averages hint at resilience.

The market is torn between fear and faith in Netflix’s long-term story. Here’s how to navigate the crossroads.The Options Playbook: Bears Dominate, But Bulls Aren’t Backing Down

Options traders are hedging for a sharp drop—or a rebound. The top OTM puts for Friday expiry are clustered between $1,000 and $1,100, with 4,881 contracts at $1,100 (the most liquid). This suggests institutional players are bracing for a test of key support levels. Meanwhile, the top OTM calls ($1,300 and $1,800) show lingering bullish conviction, even as the stock trades 9% below its 30-day moving average ($1,206).

But here’s the twist: The put/call ratio (1.10) isn’t screaming for a collapse. It’s more of a "wait and see" stance. Traders are buying downside protection but not selling calls aggressively. That could mean two things: either bears are overhyped, or bulls are quietly accumulating cheap options to capitalize on a rebound.

News vs. Options: A Tale of Two Narratives

Netflix’s Q3 report was a mixed bag. Revenue matched estimates, memberships hit 317.6M, and ad sales hit a record. But the $619M tax charge skewed earnings, triggering a 9% selloff. The market’s knee-jerk reaction? A stampede to the exits.

Yet the options data tells a subtler story. The heavy put buying at $1,100 aligns with the stock’s 200-day moving average ($1,112), a level where technical traders might see a "floor." But the company’s reaffirmed $45.1B revenue guidance and expansion plans (like the KPop Demon Hunters franchise) suggest the long-term story isn’t broken.

Investor sentiment is split: bears see a one-time tax hit as a red flag; bulls argue it’s noise in a $45B revenue machine. The key question is whether this drop is a buying opportunity or a warning sign.

Actionable Trades: Where to Play the Volatility

For options traders, the most compelling setup is a short-term bear call spread or a long put at $1,100. Here’s how to structure it:

• Bear Call Spread (Friday Expiry): Sell the $1,300 call (OI: 5,936) and buy the $1,400 call (OI: 3,654). If NFLX stays below $1,300, the spread profits from time decay. Maximum risk is $100 per contract, but the high OI at $1,300 suggests strong resistance.
• Long Put at $1,100 (Friday Expiry): Buy the $1,100 put (OI: 4,881) as insurance. If NFLX breaks below $1,152 (lower Bollinger Band), this put could gain 20–30% in value.

For stock traders, consider scaling into a long position near $1,152 (lower Bollinger Band). If the stock holds this level, a rebound toward $1,200 (30-day MA) is likely. A tight stop-loss below $1,126 (intraday low) would protect against further downside.

Volatility on the Horizon: What’s Next for NFLX

The next 72 hours will be critical. If NFLX closes above $1,152 by Friday, the bearish options bets could unravel, triggering a short-covering rally. Conversely, a close below $1,110 (200-day MA) might force more hedging, pushing puts higher.

Longer-term, the 200D MA at $1,112 and the 100D MA at $1,222 form a wide trading range. A breakout above $1,222 would signal a return to bullish momentum, while a breakdown below $1,112 could extend the correction.

Final Takeaway

Netflix’s stock is caught in a tug-of-war between short-term pain and long-term promise. The options market is pricing in a high probability of a bounce from $1,100–$1,150, but technicals suggest that’s not guaranteed. Traders who can stomach the near-term noise might find a compelling entry here—just be ready to act fast if the 200D MA breaks.

Key Levels to Watch:

• Support: $1,152 (Bollinger Band), $1,112 (200D MA)
• Resistance: $1,200 (middle Bollinger Band), $1,222 (100D MA)
• Options Sweet Spots: $1,100 puts, $1,300 calls (Friday expiry)